As Gov. John Kasich seeks to provide tax-funded health insurance for 275,000 Ohioans through an
expansion of the state’s Medicaid program, the Republican governor also is negotiating with senior
White House officials for a deal to alter one of the key components of President Barack Obama’s
health-care law.

As expected, the two-year budget plan that Kasich unveiled yesterday includes an expansion of
the health-care program for the poor and disabled so that families earning up to 138 percent of the
federal poverty level — $31,802 a year for a family of four — would qualify for health
coverage.

Ohio would join 18 states and the District of Columbia in increasing Medicaid eligibility.

However, Kasich warned that Ohio will reverse the decision if the federal government goes back
on its promise to cover 100 percent of expansion costs over the next three years.

“I am not a supporter of Obamacare,” Kasich stressed at a news conference. But expanding
Medicaid “makes great sense for Ohio.”

The state, he said, would save $235 million over the next two years and free about $100 million
in local funds for mental-health and addiction services. The expansion would return more federal
tax dollars to Ohio and keep health-insurance premiums down by reducing uncompensated care for
those without coverage.

Kasich also disclosed that senior Obama aide Valerie Jarrett called him last week to discuss
possible “flexibility” from federal regulators for a Medicaid expansion, which the U.S. Supreme
Court declared last year was optional for states.

The governor first sought options from the White House in November, when he said he was trying
to work with Democratic President Barack Obama on behalf of a number of Republican governors.
Kasich is interested in a scaled-back expansion of Medicaid and covering those among the 275,000
with higher incomes through a health-care exchange paid for by the federal government. The same
number of uninsured people would qualify for coverage under the two scenarios; the only difference
is that those in the exchange would get insurance from the private sector.

Kasich said he will seek to expand Medicaid regardless of whether a deal is reached with the
Obama administration, but Jarrett “deserves credit” for responding to his earlier overtures, he
said.

A senior White House official told
The Dispatch: “Valerie’s conversation with Gov. Kasich was intended to underscore the
notion that we’re working aggressively and creatively with states on this, not to negotiate
specific deals for Ohio ... Gov. Kasich has offered in the past to engage in a conversation with us
and other governors on the topic of flexibility broadly, and this call was taking him up on
that."

Ohio business leaders, health-care providers and advocates for the uninsured have encouraged the
governor to expand Medicaid, but some conservatives opposed to Obamacare and concerned about the
federal deficit remain unconvinced.

Democratic leaders were quick to praise Kasich.

“Expanding Medicaid as provided for by the Affordable Care Act will have very significant
benefits for Ohioans who are struggling to obtain basic health-care coverage,” said House Minority
Leader Armond Budish, D-Beachwood.

Overall, Medicaid spending under Kasich’s plan would increase 13.3 percent next year and 4.5
percent the following year. Much of that increase would pay for an estimated 230,000 Ohioans now
eligible but not enrolled in Medicaid. They are expected to sign up when the new “individual
mandate’’ takes effect in 2014. It requires most Americans to have health coverage or pay a
fine.

Budget highlights

Would spend $63.3 billion over two years, increases of 10.5 percent and 6.8 percent,
respectively — mostly from increased federal Medicaid funding

Would revamp state income and sales taxes to bring a net tax cut of $1.4 billion over three
years